If consumers paid out of pocket for their phones then they would be more picky about upgrading and plan prices. It would also make upselling shitty plan features harder so the carriers would loose a lot of money.
Then I tell them they'd be better served by switching to an MVNO offering significantly better rates and they come back and tell me they're locked in for a while because they just financed new devices.
I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
Cheaper phones by definition have slimmer margins.
I find that markets that are financialized where the price of the good is obfuscated are less efficient. This is because efficient markets rely on price discovery. Healthcare is an excellent example of this.
A better distinction is not small vs. large, but appreciating assets vs. depreciating. Houses tend to increase in value, so it's usually okay to finance (pandemics and market crashes are the exceptions) because you often make a profit when it's time to sell. Phones tend to decrease in value after purchase, so financing it just means you're losing even more money at the end. Phones are also fragile so it's common to break one and still have to make payments.
AT&T’s prepaid plans start at is 25$/month for unlimited calls & text, “Unlimited” data (After 16GB it degrades to 1.5mbps) + 10Gb tethering. Meanwhile their cheapest regular plan is 50$/month for worse service (4GB data).
Sure they don’t offer the best plans prepaid, but that’s basic price discrimination.
And in store there's clearly the price tag right beside the demo model.
So hard to see how its obsfucated like healthcare.
Sure, let’s just ignore the disastrous adware, bloatware etc that also “subsidize” these cheaper phones, to say nothing of the actual capabilities or user experience of said devices.
I even paid straight up for my current Laptop, some $2700. The only things in my life I threw a down payment on are furniture: my bed, my kitchen chair setup, and my patio furniture.
With a prepaid plan, you credit the operator, because you pay upfront, and the service is rendered after it, and ceases if your balance goes below zero.
With regular plans, the operator credits you, and you can be late with your payment for many days before the operator ceases servicing you.
So it's a month worth if credit, plus a different risk profile.
Also, it's market segmentation: the prepaid plan is the gateway drug %)
These systems rely on intentionally leaving people in the dark to manufacture legitimacy under the guise that well-educated consumers can avoid the hidden fees and restrictions. It's the expected end state when these shady schemes are allowed to exist.
Never again.
I guess the carriers still make money because once habituated, especially if they've never done the port-number-to-new-carrier thing, people stay in the high priced plan longer than necessary. Like the three years until they've truly paid the above-market price for the phone, and are now eligible for another "free" phone which they may not even take advantage of.
For what it's worth, carrier locking phones has been illegal here for some years (and any phone from the locked era had to be unlocked for free for the asking after the law was changed) and it hasn't changed anything in terms of these rent-to-buy type carrier plans. So I don't know what the fuss is about. A contract is a contract.
Or is there some carrier that sells the expensive $1000+ phones on prepaid plans?
There may be a really good reason for a not well-off family to get a new and advanced phone from the phone company, for a small monthly payment. They can't afford the upfront cost, and will pay more for a depreciating asset. On the other hand, they now may have a phone with a great camera to record their kid's school graduation, or other such event that only occurs once. Or they may finally use a smartphone with 4G / 5G to have good-quality video calls with some faraway friends or kin, which were a pain with their old phone. Etc.
This still beats buying a new phone with a credit card, at 29.95% APR.
It wasn't cheaper than all alternatives. There were a bunch of virtual operators offering better monthly rates than the big networks but I've personally had bad experiences with network deprioritization on them. Depends very much on your individual circumstance, I'm in NYC and the network is clearly pretty saturated.
The locked phones are usually sub $250 and have some kind of finacial gimmick to get the sticker price lower. Often it will be some carrier specific model name. Just sort by price low to high and you'll find them.
I had three free phones, service for 3 lines was 120$/mo. Phones were paid for up front and got ~60$ off each that in bill credits for 24 months.
The math came out exactly right
If you were going to buy a plan from AT&T anyways at $60/month, they are willing to give you a $800 phone for “free” if they can lock you into a 2 year contract.
Buying your own phone for $800 and paying $60/month isn’t a better deal but it does give you flexibility to drop the carrier whenever you want.
Consumers can decide.
Banning a consumer option sounds anti-consumer, not pro.
A similar psychological thing is going on in both cases I feel - some minority will manage to emerge winners due to a mixture of persistence, intelligence, luck, greed, etc. And the majority will get squeezed, or else how would such large percentages of marketing budgets continue to be pumped into club card and subscription schemes.
ATT, Verizon, and Tmobile are selling many many expensive phones, locked, on 24 momth payment plans, literally hundreds of possible configurations of dozens of models.
This is generally strictly true, but most people don't move on to the next deal once they've paid off their device, and end up paying more than they would have had they bought the device outright, device+plan cost considered.
I’m switching over to Lucky when I have the mindspace to do it.
Did you add this time you spent into those totals? I think if you did, your math would come out differently. Personally, if I even feel the need to do any math like this, the answer is already "no, I can't afford this".
I don't see why its different than a car really. While some dealerships are adding GPS trackers nowadays, there is nothing stopping you from buying a car on credit and driving it to Mexico and hiding it in a locked garage. It's going to be very difficult to buy another car if you do that though, and that's enough of a deterrence for most people as they have to continue living their lives and eventually buy a new car.
Between Reno and Las Vegas it's pretty stark, huge holes in Verizon's coverage and a few 3G CDMA only towers, while AT&T has strong band 14 coverage, and T-Mobile has slightly better coverage than Verizon but also lets you roam onto AT&T.
Meanwhile in the San Juans the situation is dire on Verizon, with only one tower just on Orcas Island. AT&T has a handful of towerd, two on Orcas and then they force roam everyone onto T-Mobile who has dozens of local towers.
So long as you are on AT&T or T-Mobile with roaming you'll have the best coverage possible, but if your stuck on Verizon it seems your in for a rough ride these days.
It's possible there are some obscure features that may not work properly but for general usage as far as phone calls, texting, data usage, I've never heard of anyone having any issues with their Canadian phone internationally, besides maybe the cost of roaming.If you have a source from recent times that says this, I'd like to see it.
As far as minimal competition goes, there is not an infinite amount of cellphone carriers in the US either that will give you a phone on credit, especially if you have bad credit. I'm sure there are existing ways you can scam phones out of carriers too if you are fine with being banned from the carrier and/or torching your credit.
The only thing I'd get excited about in a new phone is a faster CPU.
Some companies do better in this regard. For example, Samsung provides four major updates, whereas the last mid-range Motorola I owned only gave me one. By the time I receive the fourth update on my current phone, I'll probably be dealing with bigger issues, like the battery not holding a charge—or worse. I wish phones were more serviceable, but that’s just not the case. Still, at mid-range prices, I’m fine with replacing it when it’s on its last legs.
If you're inclined, though, most Android phones allow you to unlock the bootloader and tinker with the software as much as you want.
If this isn't obviously the case, the "normal" plans are subsidizing phone sales. This means that you're almost certain to be better off with a vendor that doesn't offer this or at least offers it in a way that isn't dishonest.
At the end of the day, even if what you say is true making use of this deal makes things worse for everyone because it is part of a larger strategy. Inevitably you will be squeezed for more money than you otherwise would, sometimes it just takes a while.
To your credit, just stick with the subsidized phone deal, and then don't upgrade when it's paid off. At that point, your phone is now technically unlocked